Understanding Shareholders' Use of Information and Advisers (pdf)

USE OF ACCOUNT STATEMENTS,PROSPECTUSES, AND ANNUAL REPORTSAccount StatementsTo shareholders, the account statement is probably the mostimportant communication they receive from a mutual fundcompany. Nearly all shareholders use them to monitor theirmutual fund portfolios.To identify how mutual fund shareholders use accountstatements, respondents who indicated they had received anaccount statement in the 12 months preceding the surveywere asked whether they had used account statements toobtain the four pieces of information listed in Figure 22.Respondents typically used account statements to obtain thetotal value of a fund account, a change in the value of anaccount balance, and the price per share of a fund.Respondents who had consulted professional financialadvisers said they typically obtain three items of informationfrom fund account statements, whereas respondents who hadnot consulted advisers indicated two. In fact, more respondentswith an adviser than without reported using mutualfund account statements to obtain a fund’s price per share andto compare a fund’s performance with that of other investments(Figure 22).Some differences in the use of account statements wereevident among respondents who had consulted a professionalfinancial adviser. Compared with respondents who rely completelyon an adviser for fund purchase decisions, more ofthose participating in or controlling the fund decisionmakingprocess said they use account statements to track a fund’s priceper share (see Figure 52 in Appendix B).Annual ReportsAnnual reports generally contain detailed information on arange of mutual fund topics, including one-, five-, and tenyearperformance data, information about a fund’s portfoliomanager, a listing of the companies in which a fund invests,and management’s discussion of fund performance over thepreceding year. The median number of items that respondentsindicated obtaining from mutual fund annual reports wasFIGURE 22Use of Mutual Fund Account Statements 1(percent of respondents who recalled receiving an account statement)Use of a Professional Financial AdviserAllRespondents Had Consulted Had Not ConsultedTo find out the total dollar value of a 90 91 89fund accountTo track the change in the total dollar value 86 86 86of a fundTo track the price per share of a fund 73 76 69*To compare a fund to other investments 42 50 28*ownedMean number of items obtained from 3 3 2account statementsMedian number of items obtained from 3 3 2account statements1In the 12 months preceding the survey. Multiple responses included.Note: Number of respondents varies.*Respondents who had not consulted an adviser are statistically different from those who had at the 95 percent confidence level.26